PhD Student Question on "Lean Org Design"

I received a question from a PhD student in Indiana, he asked if I could post it here. If you have any ideas or responses for him, please use the “comments” feature of the blog.

“I've redesigned organizational charts for businesses going through a lean transition; but of course the structure varies slightly from one organization to the next. Has anyone put together a “lean” organizational chart that, for the most part, is effective universally throughout the manufacturing industry? I tend to push decision-making power to the lowest possible level and remove both functional barriers and levels of management. This has worked rather well; but am curious about the approaches taken by others in the field of lean consulting.”

One mistake I’ve seen “lean” factories make is to remove some “non value added” roles, such as front-line supervisors and material handlers. On supervisors, many factories remove the front-line layer, and you see a manager with three departments, 30 people, spread out across a large factory. It’s very hard to manage such a spread out group, it’s not “lean” to be short on managers. If you want leaders to do real coaching and problem solving support for your production teams, you really need a front-line supervisor (and you have to make sure they are doing the right things). My understanding is that Toyota has a very low span of supervision, more supervisors than you might see in most plants. But, they are working supervisors and actively help and coach. The Toyota Way has a good description of that process.

On material handlers…. that one material handler can reduce the waste of many production workers and multiple production cells. A material handler might seem wasteful to some, but that role keeps a production cell running because operators aren’t having to interrupt value-added work to go get/find parts.

Most companies evolve into more Lean entities and their organization does not evolve at the same rate as their shop floor. There have been many articles written about the fear workers have about the changes Lean will bring to their lives; there have not been as many about the fear of managers who don’t want to write themselves out of the org chart.

There is more resistance to change in the offices of manufacturing companies than there is on the shop floors. This causes the design, or redesign, of the organization to lag the start of Lean, or to not get done at all.

I worked as an internal consultant in a managerial position for a major corporation that was big on Lean on the shop floor, and we were able to double the output from the same shop in three years and we kept the headcount the same (growth vs reduction). At the end, I was three levels from the janitor and nineteen levels from the CEO. There was no organizational change above my level.

I would judge the effectiveness of the organization by it’s ability to support the process. A lean organization usually looks more “horizontal” than “vertical”. People are grouped by product or service more than by job function, and cross-functional teams are the base unit.

Does anyone know of a method that allows one to overlay the org structure over the process to see how they align? I’ve used swim lane charts, but maybe there’s something better out there.

I’ve been attempting some research into Org charts for a few months now at the request of our General Manager. The best I can find is the “Rule of 5” within Toyota, but I have yet to actually see a Lean Org Chart.